Bills Digest No. 135 2003-04

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

On 27 November 2003, the Legislative Assembly
of the ACT passed the Crimes (Industrial Manslaughter)
Amendment Act 2003 (the ACT act ). This Act made the ACT the
first jurisdiction in Australia to introduce the offence of
industrial manslaughter . Other states have considered or are
considering similar laws, including Victoria, Queensland, Western
Australia and South Australia.(1)

The present Bill is the Commonwealth s
legislative response to the ACT Act, although it also pre-empts
similar moves in other jurisdictions. It proposes to provide
immunity to the Commonwealth, its agencies, businesses and
employees from any state and territory industrial manslaughter
laws. Although the Commonwealth has the constitutional power to do
so, the Bill does not override the ACT Act as it applies to the
private sector or the ACT Government.

The primary rationale for creating a specific
offence of industrial manslaughter is that existing laws are
inadequate for the prosecution of recklessly or negligently caused
workplace death. In jurisdictions other than the ACT, prosecutions
for such incidents are possible under either:

the general common law crime of manslaughter, or

existing occupational health and safety laws.

Both of these options have limitations when
applied to workplace death. As explained in the presentation speech
for the ACT Act:

The objective of the Crimes (Industrial
Manslaughter) Bill is to reinforce the important duties employers
have to provide safe and healthy workplaces, and to ensure that
employers who fail to meet these duties are held accountable if a
worker dies.

These duties of care are well established through
occupational health and safety legislation and through the common
law. There are, however, significant problems in prosecuting
employers under existing manslaughter laws, as many people are
employed by corporations.(2)

The chief problem in applying the general
crime of manslaughter to industrial circumstances is the difficulty
proving that a company has been negligent. Under common law
principles, a company can only be found guilty of an offence if the
necessary mental element (in the case of manslaughter, gross or
criminal negligence) can be attributed to the directing mind and
will of the corporation, normally the directors or chief executive
officer. This is known as the Tesco principle after the
British case, Tesco Supermarkets v
Natrass.(3)

The Tesco principle makes
prosecutions of large companies for manslaughter difficult as the
negligent conduct leading to the death most often occurs at a
mid-management level. As one commentator explains

The Tesco principle is unworkable in the
context of larger corporations because it fails to reflect the
diffused nature of decision-making in large or even medium size
organisations. Offences committed on behalf of organisations often
occur at the level of medium- or lower-tier management whereas the
Tesco principle requires proof of fault on the part of a
top-tier manager, or a delegate in the sense of a person given full
discretion to act independently of instructions in relation to part
of the functions of the board. It is easier to prove fault on the
part of a top manager of a small company, but if that can be done
there is usually little need to prosecute the company as well as
the manager.(4)

In Australia, the Tesco principle
seems to have been a significant barrier to the prosecution of
companies under the general law of manslaughter. The Victorian case
R v Denbo Pty Ltd(5) appears to have been the
only successful prosecution.

Companies can be, and are, more easily
prosecuted and punished under occupational health and safety (OHS)
legislation in every Australian jurisdiction. However, only fines,
not prison terms, may be imposed for these offences. These fines
also tend to be relatively minor. In the ACT, for example, the fine
for failure by an employer to take all reasonably practicable steps
to protect the health, safety and welfare at work of [their]
employees attracts a maximum penalty of $25,000 for an individual
employer or $125,000 for a corporate employer.(6)
Further, the legislation provides no differentiation between
failures that result in minor injuries and those that result in
death.

Proponents of industrial manslaughter laws
argue that a specific crime for this particularly egregious
workplace offence could be used to provide more substantial
penalties and to imply greater opprobrium. Several commentators
have pointed out that OHS offences tend to be seen as merely
quasi-criminal, rather than genuinely criminal, including by the
inspectorates charged with a policing function.(7) In
the words of a former head of the Department of Labour and Industry
in Victoria:

A concept in the minds of many people is that the
inspector is there in the workplaces to detect breaches of the law
and to prosecute offenders. Some even regard the number of
successful prosecutions as a measure of the success of the
inspectorate.

Most inspectorates would take the opposite view.
They see as a failure any inspector who constantly has to launch
prosecutions in order to obtain compliance. They see the
legislation they administer as remedial rather than punitive in
nature, ie they are there to improve the conditions of work, not to
make the employer or employee suffer penalties for breaches of the
law.(8)

As the academic Alan Clayton describes OHS law
and the use of minor penalties, The semiotics of this position is
that occupational health and safety violations are essentially
purchasable commodities rather than socially intolerable offences.
(9) In this light, the separate and specific provision
of a crime, placed in the criminal rather than OHS legislation and
subject to prosecution by the police and Director of Public
Prosecutions rather than an OHS inspectorate, can be seen as a
means to ensure that workplace death is understood to be an
intolerable risk, treated with greater severity that other OHS
contraventions.

The ACT Act introduced a Part 2A into the ACT
s Crimes Act 1900, creating the new crime of industrial
manslaughter.

An employer or senior officer of an employer is guilty of the
offence if:

a worker of the employer dies in the course of their
employment(10) or following injuries sustained in the
course of their employment

the employer or senior officer s conduct caused the death,
and

he employer or senior officer was either:

reckless about causing serious harm to the worker, or any other
worker of the employer, by the conduct, or

negligent about causing the death of the worker, or any other
worker of the employer, by the conduct.

The following points should be noted about the
ACT Act:

the term workers is used rather than the narrower
employees. Accordingly, the legislation applies to
employees, independent contractors, outworkers, apprentices,
trainees and volunteers

the Act
provides high penalties: a fine of up to $200 000 for individuals,
$1 million for corporations, imprisonment for up to 20 years or
both a fine and imprisonment. Interestingly, the law also allows
the court to impose name and shame style punishments for corporate
offenders, such as requirements that they advertise the fact of the
crime and the penalty on television or establish and operate a
community service

the test of criminal negligence used is significantly higher
than the test used in civil negligence trials

senior officers of an employer may be
individually liable for the crime. Senior officers include the
following:

for government authorities, the relevant Minister, chief
executive officer or any other person in an executive position who
makes or takes part in making decisions affecting all, or a
substantial part, of the functions of the authority

for corporations, any officer of the corporation

for other
entities, a person in an executive position who makes or takes part
in making decisions affecting all, or a substantial part, of the
functions of the entity, or a person that would be an officer if
the entity were a corporation

vicarious criminal liability is not imposed on senior
officers for the actions of subordinate employees. Accordingly
senior officers will only be individually liable where the
negligence or recklessness can be directly attributed to their
personal conduct. This contrasts to a controversial approach
previously proposed by the Victorian government(11)

interaction with the corporate criminal responsibility
provisions of the Criminal Code 2002 (ACT) (the Criminal
Code) broaden the impact of the ACT Act.(12) Among other
things, these provisions provide that:

where the fault (or mental) element of a crime is negligence and
no individual employee, agent or officer of the corporation has the
fault element, the corporation s conduct as a whole may be
considered to determine if negligence has occurred, and

where the fault element is recklessness, recklessness may be
shown by proving that a corporate culture existed within the
corporation that directed, encouraged, tolerated or led to
non-compliance, with the contravened law or that the corporation
failed to create and maintain a corporate culture requiring
compliance with the contravened law.

The application of the corporate criminal
responsibility provisions of the Criminal Code is the most
significant feature of the industrial manslaughter laws. These
provisions, modelled on Division 12 of the Commonwealth
Criminal Code 1995, dramatically reform the Tesco
principle by removing, in certain circumstances, the difficult task
of finding the company s directing mind . The corporate criminal
responsibility provisions do not apply to the general crime of
manslaughter.

For practical purposes, a similar outcome
could have been achieved by making the general crime of
manslaughter subject to these provisions. However, it would also
have made it easier to prosecute companies in contexts beyond the
workplace, for example for deaths that result from environmental,
building or food safety failings. By providing a specific
industrial manslaughter crime the ACT has been able to limit
corporate liability for manslaughter to the industrial context
only.

The present Bill proposes to nullify any
effect the ACT Act would have on Commonwealth employers, employing
authorities or employees.

The status quo, by virtue of s 27 of
the Australian Capital Territory(Self Government) Act
1988 (Cth), is that the ACT Act does not apply to the
Crown in right of the Commonwealth . As a general rule, Government
agencies, except government business enterprises (GBEs), would
attract this protection.

The extent to which employees of the
Commonwealth would be covered by this immunity is not clear. The
concept of the Crown in right of the Commonwealth may extend to
public servants depending on the circumstances, including the
purposes for which their agency was established, whether or not
application of the law in question would cause prejudice to the
Crown and the nature of the conduct in question.(13)
Given the complex and qualitative nature of these tests, it is not
possible to outline a formula to describe which Commonwealth
employees and what conduct by those employees will and will not be
subject to ACT law. It should be noted, however, that the
jurisprudential trend of recent decades has been to read down the
concepts of the crown and its immunities to ensure that public
servants are not placed beyond the reach of the ordinary criminal
law .(14)

On a different basis, Commonwealth public
servants may be immune from the ACT Act as a consequence of s 121
of the Legislation Act 2001 (ACT). This provides that
criminal offences are presumed not to apply to the Commonwealth
government nor to its instrumentalities, officers, employees or
contractors (as long as they are acting within their functions,
roles or contracts). However, s 121 provides only a presumption and
this may well be displaced by the ACT Act which clearly envisages
application to government.

Accordingly, while the Commonwealth as an
entity is clearly immune from the ACT Act and Commonwealth GBEs are
clearly not, the position of Commonwealth employees is unclear and
without passage of this Bill would probably remain so until
litigation has tested both the scope of s 27 of the ACT Self
Government Act and the effect of s 121 of the Legislation Act.

It should be noted that the Bill does
not propose to override the ACT Act as it affects private
sector employers and employees. Given that the ACT is a territory
and not a state, this would be within the Commonwealth s power
under section 122 of the Constitution and the Commonwealth
Parliament s position as the paramount legislature for the ACT.

The Commonwealth Government s criticisms of
the ACT s industrial manslaughter laws have been most clearly
stated in the second reading speech to this Bill. In this speech,
the Minister for Employment and Workplace Relations made the
following points:

the ACT Act is
inconsistent with the overall objective of an occupational health
and safety legislative framework which is to prevent workplace
deaths and injuries

it is also
contrary to the unified and integrated OHS legislative system
established under the internationally recognised Robens model which
all Australian jurisdictions have adopted, including the ACT

it places
employers and employees in an adversarial environment and create a
culture of blame

it duplicates the existing offences already available under the
ACT Crimes Act and ACT OHS legislation , and

it singles out employers for punishment after a death which
neglects the involvement of a range of parties such as another
employee, manufacturers, and suppliers of plant and equipment. This
creates inequities and gaps in attributing responsibility in the
unacceptable event of a workplace fatality or serious injury, and
wrongly presumes that employers are solely responsible for all
workplace injuries and deaths .(15)

The substantial issue raised by the Bill
appears to be about the regulatory approach to OHS that industrial
manslaughter embodies. Industrial manslaughter laws represent a
punitive approach, in contrast to an advisory or supervisory
approach, to regulation. It has been opposed on this basis by the
Australian Chamber of Commerce and Industry (ACCI) who have said
Employers need advice and guidance not enforcement and punishment.
(16) Similarly, the Explanatory Memorandum
says

The Commonwealth considers that creating
industrial manslaughter offences under the general criminal law is
inconsistent with the overall objective of the occupational health
and safety legislation framework to prevent workplace deaths and
injuries, rather than just punishment after the event.
(17)

This statement seems to deny that punishment
after the event can help to prevent deaths and injuries by acting
as a deterrent for negligent or reckless behaviour. However, as
with most criminal law, the current OHS legislative framework does
recognise a role for punitive deterrents. Under the prevailing
Australian model, punitive criminal sanctions sit at the top of an
enforcement pyramid that starts with informal advice, cautions and
warnings at the base and moves to civil action in the
middle.(18)

Where industrial manslaughter departs from the
traditional OHS regulatory model is that it is placed in the Crimes
Act rather than OHS legislation. As a result, its enforcement will
be pursued by police and the DPP, unlike other OHS infringements
which are enforced by OHS inspectorates. This was discussed above
as a rationale for industrial manslaughter laws, in that they
underscore that workplace death, where it is caused by negligence
or recklessness, is an intolerable outcome and should not be
subject to the lower levels of the enforcement pyramid. However,
others have suggested that this approach could be
counter-productive. For example, ACCI says:

The response by employers to increased penalties
of up to $5,000,000 for the enterprise and fines plus a charge of
corporate manslaughter for the CEO, the board and other managers
will be predictable. Instead of entering meaningful and
constructive negotiations with the authorities to resolve cases of
alleged breaches, there will be a change in approach in that
individual employers will engage in major legal proceedings to
protect the company and its measures from these draconian
measures.(19)

This view appears to focus on what happens
after a workplace death, suggesting that OHS authorities would make
more progress in preventing the next death at that workplace with a
co-operative rather than hostile relationship. Industrial
manslaughter laws focus on what happens before a workplace death,
hoping that fear of a significant penalty would prevent the death
in the first place. Where a death has occurred, it assumes that the
high profile prosecution of one company would prompt others to
ensure it does not happen to them.

The debate might be reduced to a central
question about whether tough punishments and deterrents or
education and compliance assistance are better means of preventing
undesirable behaviour. This is a perennial dilemma that legislators
would be familiar with as it animates debates in almost every area
of regulation, from corporate governance to drug policy.

It should be noted that industrial
manslaughter laws put death into a special category, as an
intolerable outcome of an unsafe workplace. It does not necessarily
affect the mix of punitive/educative enforcement strategies that
might apply to other workplace injuries or OHS contraventions that
have not (yet) resulted in injury.

The Minister s argument that the industrial
manslaughter law duplicates existing laws seems inconsistent with
his insistence that it is a flawed law that requires the present
Bill s intervention. Commonwealth intervention would rarely be
warranted to overcome merely superfluous legislation. As discussed
above, and as the present Bill recognises, the ACT Act does go
beyond the previously existing law.

The Minister s argument that industrial
manslaughter singles out employers for liability is at odds with
the central rationale of the ACT legislation: that under previous
law corporate employers were, unlike other actors, almost immune
from criminal prosecution for workplace death. In particular,
existing general manslaughter laws were and remain adequate for the
prosecution of co-employees. Similarly, manufacturers and suppliers
could be prosecuted where they were natural persons. In this way,
industrial manslaughter fills, rather than creates, gaps and
inequities in the attribution of criminal responsibility.

Parliament may want to consider whether it is
appropriate that government agencies and GBEs should be immune from
criminal liability that would apply to private businesses and
citizens in the same circumstances.

To the extent that state and territory laws
may bind the Commonwealth, the Commonwealth clearly has the
constitutional power, from various heads, to override any such law.
Conversely, the Commonwealth may decide to relinquish or limit its
immunity from state laws. Whether it does so or not is a matter of
policy.

In the field of OHS, it is long established
that the Commonwealth, its agencies, employees and GBEs should be
regulated by a separate national system of laws governing
standards, enforcement, compensation and
rehabilitation.(20) Accordingly, if industrial
manslaughter is considered to be a significant re-shaping of OHS
regulation, it might be considered consistent with current practice
to ensure that Commonwealth agencies and GBEs are not affected by
it. On the other hand, one feature of the Commonwealth s OHS regime
is that it allows any state or territory law that promotes the occupational health and safety of
persons to operate concurrently, to the extent that it is not
inconsistent with Commonwealth law in the area.(21) To
the extent that industrial manslaughter laws do promote the
occupational health and safety of workers , and are capable of
operating alongside the Commonwealth OHS regime, the presentBillproposes derogation from that principle.

If industrial manslaughter is seen primarily
as a criminal law, different considerations might apply. As a
general rule, Commonwealth employees are subject to the criminal
laws of the states: for example, a Commonwealth employee who
commits a traffic offence while driving in the course of their
employment may be prosecuted under state laws. Similarly, a
Commonwealth employee who causes the death of a colleague through
criminal negligence or the commission of an unlawful and dangerous
act might be prosecuted under state or territory law for
manslaughter (the general crime). A similar principle would apply
to Commonwealth GBEs in respect of any corporate offences. In the
absence of Commonwealth legislation specifically providing that
state or territory criminal law applies, the picture is less clear
with respect to the corporate criminal liability of other
Commonwealth agencies.(22)

Given that other state and territory criminal
law would normally apply to Commonwealth employees and GBEs, at
least, is it appropriate for the Commonwealth to override one
particular criminal law?

The ACT government has argued against doing so
on the basis that it will create a situation in which some workers
will be covered by one law and other workers will be covered by
another and it makes a very simple law a lot more complicated.
(23) The ACT Chamber of Commerce has reportedly called
on the Commonwealth to override the entire ACT Act, not simply for
Commonwealth agencies, arguing that in the ACT, where we have a
border running through the business community, we would have three
sets of government regulation: ACT, Commonwealth and NSW
.(24) However, given that the ACT Act does not apply to
most Commonwealth agencies anyway, industrial manslaughter laws
already apply to some workers in the ACT and not others. The
present Bill simply changes where that line is drawn.

At a basic level, the unequal application of
the criminal law might be considered unjust. Is it just, for
example, for Optus to be subject to industrial manslaughter laws
while Telstra is not? From the opposite perspective, is it fair
that the family of a worker killed by an employer s recklessness
can see the employer prosecuted if the victim worked in the private
sector but not in the Commonwealth public sector?

Further, immunising the Commonwealth from a
particular state or territory criminal law could be thought to
undermine the democratic rights of that state or territory s
electors, as expressed through their legislatures. This view has
been taken by the ACT Government which has promised to resist any
attempt, any move to override a democratic government.
(25)

On the other hand, there are many
circumstances in which the Commonwealth and other Australian
governments do immunise themselves from the application of their
own, or other governments , laws. A relevant example is the
Occupational Health and Safety (Commonwealth Employment) Act
1991 (OHS(CE) Act) itself which provides that the Commonwealth
cannot be prosecuted for an offence under the Act (although
notably, that Act does allow that Commonwealth GBEs can be
prosecuted, like their wholly private sector
equivalents).(26)

At the time of writing, the Federal
Parliamentary Labor Party has not made any public comment on
whether it will support the present Bill. However, the 2004 ALP
Conference did congratulate the ACT Government on successful
passage of the industrial manslaughter law.(27) The
Stanhope Labor Government of the ACT stands by its law and has
opposed the present Bill. Further, the Labor Governments of Western
Australia, South Australia, Victoria and Queensland have considered
or are considering similar laws in their own jurisdictions.

The Australian Democrats do not appear to have
made a public statement regarding their position on the present
Bill, nor do they appear to cover the issue of industrial
manslaughter in their national workplace relations policy available
from their website.(28) However, Ms Roslyn Dundas, MLA
(ACT) from the Democrats supported ACT Act when it was enacted last
year.(29) Also, Democrat MLC (NSW), the Hon. Arthur
Chesterfield-Evans has introduced a private members bill proposing
industrial manslaughter laws for NSW.

Mr Michael Organ, the Member for Cunningham
from the Australian Greens, opposed the present Bill on the day it
was introduced.(30) He has also promised to introduce a
private members bill proposing industrial manslaughter as a
Commonwealth crime.(31)

The main provisions are relatively
straightforward. The Bill would amend the OHS (CE) Act to insert
proposed section 11A with effect that the
following would not apply to Commonwealth employers, employing
authorities or employees:

the ACT Act, specifically, and

any future state or territory law that imposes a criminal
liability in respect of a death that occurs during, or in relation
to, the person s employment or provision of services
and is prescribed by regulations.

According to the second reading speech, the
criterion that a law be prescribed by regulations has been added
because otherwise the new section could catch general criminal
offences such as manslaughter, murder or culpable driving . It then
states that only these particular type of laws [that is, industrial
manslaughter] would be prescribed. (32)

The Bill itself does not guarantee that its
provisions would not be used to create regulations that immunise
Commonwealth agencies and employees from the general criminal
offences the Minister mentioned.

Drafting that targeted the unique elements of
industrial manslaughter more carefully might have avoided this
problem. However, the difficulty of achieving this without creating
loopholes that would allow states and territories to achieve the
same outcome with differently worded law can be appreciated. An
alternative approach might have involved focussing on exactly what
aspects of industrial manslaughter laws are opposed. For example,
given that the most significant effects of industrial manslaughter
laws are the increased penalties and the application to companies,
a more targeted approach might have been to set a cap on penalties
applicable to the Commonwealth or to reassert that the
Tesco principle applies to the Commonwealth and its
agencies.

The Bill proposes that immunity from state and
territory industrial manslaughter laws be extended to the
following:

Commonwealth employers which include:

the Commonwealth
(for example, Commonwealth departments)

Commonwealth agencies established for a public purpose or under
Commonwealth legislation (for example, the Australian Competition
and Consumer Commission or Comcare), and

companies incorporated in Australia in which the Commonwealth
has either a controlling or substantial interest (for example,
Telstra). (A controlling interest requires the ability to cast more
than half the votes at a general meeting, control of more that half
the share capital or control of the composition of the board of
directors; a substantial interest requires control of more than or
as many votes at a general meeting as any other single person.)

employing authorities , who are those people or bodies
responsible for employees and contractors performing work for a
Commonwealth entity, or responsible for workplaces where such work
is occurring. For example, the Chief of the Defence Force is the
employing authority for the Australian Defence Force, and

employees , which, in general terms, includes employees of all
Commonwealth employers.(33)

The Bill s proposed immunity will not extend to
private enterprises contracted by or supplying to the
Commonwealth.

With respect to the ACT Act, the Bill would
have a retrospective action to the date that it was introduced,
that is to 1 April 2004. The ACT Act took effect from 1 March 2004,
so this would leave Commonwealth authorities with potential
criminal liability only for deaths that occurred in that month.

Immunising the Commonwealth, its employees and
GBEs from state or territory law raises three concerns:

it can lead to unjust outcomes, with different judicial
consequences for the same conduct

it undermines a
democratically determined policy on what conduct should attract
punitive sanctions, and

it derogates from the principle that state or territory laws
that promote occupational health and safety should be allowed to
operate concurrent to the Commonwealth OHS system if they are
capable of doing so.

On the other hand, it might be argued
that:

the Commonwealth has principal legislative responsibility for
the occupational health and safety of its employees and should
determine the shape of the OHS regime covering them

the Commonwealth, as with other Australian governments, has
regularly immunised itself from state, territory or its own laws
when there have been strong policy grounds to do so, and

in its own OHS legislation, the Commonwealth has immunised
itself and its employees if not its GBEs from OHS offences, so it
is consistent to ensure that they are similarly immunised from
state or territory-based criminal law in the OHS area.

Jacob Varghese
12 May 2004
Bills Digest Service
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